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TMI Blog2024 (11) TMI 199X X X X Extracts X X X X X X X X Extracts X X X X ..... p1, Village Varsana, Tal-Anjar, Dist. Kachchh; B. Your Lordships may be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or directions directing quashing and setting aside the orders/communications dated 26.09.2018 as well as 07.09.2019 passed by respondent No. 2 (Annexure P) and further be pleased to quash and set aside the consequential revenue Entries No. 1412 as well as 1452 (Annexure P) mutated pursuant to the aforesaid orders/communication and further be pleased to direct the respondent No. 2 not to make any claim against the petitioners with regard to land situated at Survey No. 22/2/p1/p1, Village Varsana, Ta. Anjar, District-Kachchh." 3. Brief facts of the case are as under: 3.1 Petitioner No. 1-Bank advanced financial assistance to one M/s. Mahesh Industries Private Limited Company in the year 2011 and created equitable mortgage over the property of the said company. 3.2 The petitioner-Bank registered the charge on 09.03.2011 and mutation entry to that effect was made in the revenue record. The petitioner No. 1-Bank was also registered with the Central Registry of Securitisation Asset Reconstruction and Secu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the property, as the property once sold, then charge would be shifted to the sale consideration realized and therefore it would be between the respondent State and the secured creditor as to who will have first right to recover such sale consideration. It may happen that even though the secured creditor may have the first charge over the property and respondent State might have sold the property then in that circumstances also the question would arise whether the secured creditor would be entitled to recover such sale consideration from the State Authority by virtue of first charge over the property. 33. In such circumstances, as held by this Court in case of Kalupur Commercial Cooperative Bank (Supra) and as per the decision of the Full Bench of the Bombay High Court, the secured creditor would have the first charge in view of the priority of the charge as prescribed in Section 26E of the SARFAESI Act and Section 31B of the RBD Act as the case maybe. 34. In view of the above, now the question would arise whether the subsequent decision of the Hon'ble Apex Court in case of Rainbow Papers Ltd. (Supra) would be applicable to the issue as to the priority of the charge of the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty, created in favour of, or provided for a secured creditor by a transaction, which secures payment or performance of an obligation and includes mortgage, charge, hypothecation, assignment and encumbrance or any other agreement or arrangement securing payment or performance of any obligation of any person. xxxxx 53. In other words, if a company is unable to pay its debts, which should include its statutory dues to the Government and/or other authorities and there is no plan which contemplates dissipation of those debts in a phased manner, uniform proportional reduction, the company would necessarily have to be liquidated and its assets sold and distributed in the manner stipulated in Section 53 of the IBC. 54. In our considered view, the Committee of Creditors, which might include financial institutions and other financial creditors, cannot secure their own dues at the cost of statutory dues owed to any Government or Governmental Authority or for that matter, any other dues. 55. In our considered view, the NCLAT clearly erred in its observation that Section 53 of the IBC over-rides Section 48 of the GVAT Act. Section 53 of the IBC begins with a non-obstante clause which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ute a 'first charge' on the property of such dealer or person. The corporate debtor had defaulted in payment of its tax dues and recovery proceedings had been initiated. In the meanwhile, insolvency proceedings had commenced. During the resolution process, the State tax authorities claimed that the dues payable had to be accrued previously and relied upon Section 48, in addition to Section 53 of the IBC. The State contended that the non-obstante clause in the state enactment and the non-obstante clause in the IBC operated at different fields, and the State had to be treated as a 'secured creditor' by virtue of Section 48 of the state act. This was rejected by the NCLT and the NCLAT. However, this court took note of Sections 30 and 31 of the IBC and certain other provisions and held that NCLT had erred in its observations. It was held that: "56. Section 48 of the GVAT Act is not contrary to or inconsistent with Section 53 or any other provisions of the IBC. Under Section 53(1)(b)(ii), the debts owed to a secured creditor, which would include the State under the GVAT Act, are to rank equally with other specified debts including debts on account of workman's dues for a period of 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mble to the Act itself. 55. According to the principles of statutory interpretation, when an enactment uses two different expressions, they cannot be construed as having the same meaning. It was held in Member, Board of Revenue v. Anthony Paul Benthall that: "When two words of different import are used in a statute, in two consecutive provisions, it would be difficult to maintain that they are used in the same sense..." This idea is reflected in a subsequent judgment in Brihan Mumbai Mahanagarpalika & Anr. v. Willington Sports Club." 56. The views expressed by the present judgment finds support in the decision reported as Sundaresh Bhatt, Liquidator of ABG Shipyard v. Central Board of Indirect Taxes and Customs.In that case, Section 142A of the Customs Act 1962 was in issue - authorities had submitted that dues payable to it were to be treated as 'first charge' on the property of the assessee concerned. In the resolution process, it was argued that the Customs Act, 1962 acquired primacy and had to be given effect to. This court, after noticing the overriding effect of Section 238 of the IBC, held as follows: "56. For the sake of clarity following questions, may be answere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ragrances Private Limited. 58. In view of the above discussion, it is held that the reliance on Rainbow Papers (supra) is of no avail to the appellant. In this court's view, that judgment has to be confined to the facts of that case alone." 36. From the above, it is clear that the Judgment in case of Rainbow Papers Ltd. (Supra) is confined to the facts of the said case only and therefore, it would not be required to relook the decision of the Kalupur Commercial Cooperative Bank (Supra) considering the decision of the Rainbow Papers Ltd. (Supra) of the Apex Court, as the facts of the present case are in the realm of the provisions of the RDB Act and SARFAESI Act, whereas the decision of the Apex Court in case of IBC Code confined to the facts of the said case as observed in the subsequent decision of the Apex Court. 37. It is also pointed out by the learned AGP that the decision of the Rainbow Papers Ltd. (Supra) was considered in review, which is disposed of by the Apex Court as per para 26 and 27 extracted herein above. In such circumstances, we are of the opinion that the subsequent decision of the Hon'ble Apex Court, in case of Rainbow Papers Ltd. (Supra) would not be appl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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